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Federal
prosecutors are conducting a criminal investigation into data deals
Facebook struck with some of the world’s largest technology companies,
intensifying scrutiny of the social media giant’s business practices as
it seeks to rebound from a year of scandal and setbacks.
A
grand jury in New York has subpoenaed records from at least two
prominent makers of smartphones and other devices, according to two
people who were familiar with the requests and who insisted on anonymity
to discuss confidential legal matters. Both companies had entered into
partnerships with Facebook, gaining broad access to the personal information of hundreds of millions of its users.
The
companies were among more than 150, including Amazon, Apple, Microsoft
and Sony, that had cut sharing deals with the world’s dominant social
media platform. The agreements, previously reported in The New York Times,
let the companies see users’ friends, contact information and other
data, sometimes without consent. Facebook has phased out most of the
partnerships over the past two years.
“We
are cooperating with investigators and take those probes seriously,” a
Facebook spokesman said in a statement. “We’ve provided public
testimony, answered questions and pledged that we will continue to do
so.”
[Read Brian Chen’s story on what he found when he downloaded his Facebook data.]
It
is not clear when the grand jury inquiry, overseen by prosecutors with
the United States attorney’s office for the Eastern District of New
York, began or exactly what it is focusing on. Facebook was already
facing scrutiny by the Federal Trade Commission and the Securities and
Exchange Commission. And the Justice Department’s securities fraud unit
began investigating it after reports that Cambridge Analytica, a
political consulting firm, had improperly obtained the Facebook data of 87 million people and used it to build tools that helped President Trump’s election campaign.
The Justice Department and the Eastern District declined to comment for this article.
The Cambridge investigation, still active,
is being run by prosecutors from the Northern District of California.
One former Cambridge employee said investigators questioned him as
recently as late February. He and three other witnesses in the case,
speaking on the condition of anonymity so they would not anger
prosecutors, said a significant line of inquiry involved Facebook’s
claims that it was misled by Cambridge.
[Read more on the 5 ways Facebook shared your data.]
In
public statements, Facebook executives had said that Cambridge told the
company it was gathering data only for academic purposes. But the fine
print accompanying a quiz app that collected the information said it
could also be used commercially. Selling user data would have violated
Facebook’s rules at the time, yet the social network does not appear to
have regularly checked that apps were complying. Facebook deleted the
quiz app in December 2015.
The
disclosures about Cambridge last year thrust Facebook into the worst
crisis of its history. Then came news reports last June and December
that Facebook had given business partners — including makers of
smartphones, tablets and other devices — deep access to users’ personal
information, letting some companies effectively override users’ privacy
settings.
The sharing
deals empowered Microsoft’s Bing search engine to map out the friends of
virtually all Facebook users without their explicit consent, and
allowed Amazon to obtain users’ names and contact information through
their friends. Apple was able to hide from Facebook users all indicators
that its devices were even asking for data.
Privacy
advocates said the partnerships seemed to violate a 2011 consent
agreement between Facebook and the F.T.C., stemming from allegations
that the company had shared data in ways that deceived consumers. The
deals also appeared to contradict statements by Mark Zuckerberg and
other executives that Facebook had clamped down several years ago on
sharing the data of users’ friends with outside developers.
F.T.C. officials, who spent the past year investigating whether Facebook violated the 2011 agreement, are now weighing the sharing deals as they negotiate a possible multibillion-dollar fine. That would be the largest such penalty ever imposed by the trade regulator.
Facebook
has aggressively defended the partnerships, saying they were permitted
under a provision in the F.T.C. agreement that covered service providers
— companies that acted as extensions of the social network.
The
company has taken steps in the past year to tackle data misuse and
misinformation. Last week, Mr. Zuckerberg unveiled a plan that would
begin to pivot Facebook away from being a platform for public sharing
and put more emphasis on private communications.
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